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Question;1. Chapman Inc. has several outdated computers that cost a total of $8,600 and could be sold as scrap for $4,600. They could be updated for an additional $2,400 and sold. If Chapman updates the computers and sells them, net income will increase by $5,400. What amount would be considered sunk costs?A) $5,400B) $11,000C) $8,600D) $1,2002. It costs Chapman Company $18.40 of variable and $3.75 of fixed costs to produce one bathroom scale, which normally sells for $47.00. A foreign wholesaler offers to purchase 4,000 scales at $26.90 each. Chapman would incur special shipping costs of $2.75 per scale if the order were accepted. Chapman has sufficient unused capacity to produce the 4,000 scales. If the special order is accepted, what will be the effect on net income?A) $107,600 increaseB) $23,000 increaseC) $8,000 increaseD) $23,000 decrease6. Mesh Merchandising Company expects to purchase $86,000 of materials in July and $118,000 of materials in August. 21ree-quarters of all purchases are paid for in the month of purchase, and the other one-fourth are paid for in the month following the month of purchase. How much will August's cash disbursements for materials purchases be?A) $118,000B) $64,500C) $88,500D) $110,0008. The following information is taken from the production budget for the first quarter:Beginning inventory in units 883Sales budgeted for the quarter 338,000Capacity in units of production facility 350,000How many finished goods units should be produced during the quarter if the company desires 2,100 units available to start the next quarter?A) 339,217B) 340,100C) 351,217D) 336,7839. Sala Co. is contemplating the replacement of an old machine with a new one. The following information has been gathered:Old Machine New MachinePrice $300,000 $600,000Accumulated Depreciation 90,000 -O-Remaining useful life 10 years -O-Useful life -0- 10 yearsAnimal operating costs $240,000 $180,600If the old machine is replaced, it can be sold for $24,000.The net advantage (disadvantage) of replacing the old machine isA) $18,000B) $(6,000)C) $24,000D) $(60,000)10. Astor Manufacturing has the following budgeted sales: January $120,000, February $180,000, and March $150,000. 40% of the sales are for cash and 60% are on credit. For the credit sales, 50% are collected in the month of sale, and 50% the next month. The total expected cash receipts during March are:A) $159,000.B) $168,000.C) $157,500.D) $150,000.12. Comma Co. makes and sells widgets. The company is in the process of preparing its selling and administrative expense budget for the month. The following budget data are available:Item Variable Cost Per Unit Sold Monthly Fixed CostSales commissions $1 $10,000Shipping $3Advertising $4Executive salaries $120,000Deprec?ation on office equipment $4,000Other $2 $6,000Expenses are paid in the month incurred. If the company has budgeted to sell 80,000 widgets in October, how much is the total budgeted selling and administrative expenses for October?A) $930,000B) $940,000C) $800,000D) $140,00013. The cost to produce Part A was $82 per unit in 2012. During 2013, it has increased to $89 per unit. In 2013, Supplier Company has offered to supply Part A for $75 per unit. For the make-or-buy decision,A) incremental revenues are $14 per unit.B) incremental costs are $7 per unit.C) net relevant costs are $7 per unit.D) differential costs are $14 per unit.15. At January 1, 2013, Farley, Inc. has beginning inventory of 2,000 surfboards. Farley estimates it will seli 5,000 units during the first quarter of 2013 with a 12% increase in sales each quarter. Farley's policy is to maintain an ending inventory equal to 25% of the next quarter's sales. Each surfboard costs $100 and is sold for $150. How much is budgeted sales revenue for the third quarter of 2013?A) $975,000B) $6,272C) $225,000D) $940,80016. If there were 68,000 pounds of raw materials on hand on January 1, 135,000 pounds are desired for inventory at January 31, and 400,000 pounds are required for January production, how many pounds of raw materials should be purchased in January?A) 332,000 poundsB) 197,000 pounds ?C) 535,000 poundsD) 467,000 pounds18. On January 1, Stranbrough Company has a beginning cash balance of $21,000. During the year, the company expects cash disbursements of $169,400 and cash receipts of $154,000. If Stranbrough requires an ending cash balance of $20,000, the company must borrowA) $36,400.B) $25,600.C) $20,000.D) $14,400.

Paper#45106 | Written in 18-Jul-2015

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